BJ’s Restaurants Posts Weak Third Quarter Results

Prominent restaurant chain operator BJ’s Restaurants, Inc. (BJRI) has reported weaker-than-expected results for the third quarter ended September 28, 2021. Following the release, shares of the company declined 1.8% to close at $34.50 in extended trade.

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BJ’s Restaurants reported quarterly revenues of $282.2 million, up 41.9% year-over-year. The growth in sales was mainly due to a 41.8% year-over-year rise witnessed in comparable restaurant sales. The figure, however, failed to surpass the consensus estimate of $292.79 million.

The company reported a quarterly loss per share of $0.09, narrower than the loss of $0.30 reported in the same quarter last year. The figure failed to surpass the consensus estimate of earnings of $0.11 per share.

In other key operating metrics, total restaurant operating weeks rose by 1.7% to 2,750. Further, restaurants open at period-end stood at 212, up from 208 last year.

The CEO of BJ’s Restaurants, Greg Levin, said, “We entered the quarter encouraged by positive July comparable restaurant sales across our portfolio, compared to the same period in 2019. However, we experienced the same pullback of sales as the entire industry from the spread of the COVID-19 Delta variant that began in August. The COVID resurgence also exacerbated staffing related challenges during the quarter and resulted in reduced dining room capacities and limited menus and hours in certain locations. As a result, we finished the third quarter with comparable restaurant sales down 0.5%, compared to the same period in 2019. Additionally, pandemic induced supply chain shortages caused rapid commodity food cost inflation, resulting in lower than anticipated restaurant operating margins.” (See BJ’s Restaurants stock chart on TipRanks)

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Recently, Stephens analyst James Rutherford reiterated a Buy rating on the stock with a price target of $55, which implies upside potential of 56.6% from current levels.

The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 6 Buys, 3 Holds and 1 Sell. The average BJ’s Restaurants price target of $49.67 implies that the stock has upside potential of 41.4% from current levels.

BJ’s Restaurants scores a 3 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to underperform market expectations. Shares of the company have gained 2.8% over the past year.